Queensland asset sale plan on hold after election

Plans by Australia's Queensland state government to sell an estimated AUS$33 billion (US$26.4 billion) of state-owned assets, such as coal-fired power plants and port facilities, are on hold following an election result on course to put the ruling Liberal National Party (LNP) out of power.

With around 75% of the votes counted, the LNP has 40 seats versus the Labor party's 43 in the 89 seat single house Queensland parliament, with three seats going to independent parties and three still undecided. For the LNP to remain in government they have to win the three undecided seats and strike a deal with the three independent MPs.

According to Argus, the backlash against the LNP was partly because of Labor's campaign to oppose the sale of state-owned assets, which in turn could affect the LNP's pledged funding for the development of the coal deposits in the Galilee basin in northern Queensland.

During the three years the LNP was in power in Queensland under its leader, Campbell Newman, it approved the development of five coal mines in the Galilee basin, while global thermal coal markets have experienced a sharp price slump because of oversupply and slowing demand growth.

Newman had pledged that some of the revenue raised from the assets sales will help fund the Galilee coal projects. The Queensland state Labor leader, Annastacia Palaszczuk, said during the election campaign that her party will remove state subsidies for the Galilee projects and ban any dumping of dredge material on the Great Barrier Reef. Queensland is also the world's largest exporter of hard metallurgical coal.

Labor currently has a stronger chance than the LNP to form a minority government, which would be a remarkable political turnaround for Labor after it lost the 2012 Queensland state election and only had seven of the 89 seats three years ago. It also represents a change in Australian voting habits, as it is rare that a one-term government is removed from office and is normally allowed to serve at least two terms.

The past three months have seen two Australian state governments dismissed after one term with the LNP in Victoria ejected after one term and now in Queensland. The result could also have ramifications for next month's state election in New South Wales, where the ruling LNP coalition has also pledged to sell state-owned power and port assets after it was elected in 2011 after 16 years of Labor rule.

The Queensland state poll also has an impact for federal politics, where LNP coalition prime minister Tony Abbott, who was elected in September 2013, is behind Labor leader Bill Shorten. A Fairfax-Ipsos opinion poll showed that only three of every 10 respondents expected Abbott to still be prime minister before next year's election.

Abbott has faced criticism throughout his time in office for both his policies and his gaffes, which are well documented. He has recently been embroiled in a controversy that has split his own LNP party, after deciding to award Prince Phillip a knighthood.